Minutes of the 792nd Meeting

March 23, 2018

Note: These minutes are in draft form pending approval by the Board at its next public meeting.

The 792nd meeting of the Nebraska Power Review Board (“the Board” or “PRB”) was held in the Liquor Control Commission hearing room, Nebraska State Office Building, 301 Centennial Mall, Lincoln, Nebraska. The roll was called and present were Chairman Reida, Vice Chairman Morehouse, Mr. Hutchison, and Mr. Moen. Mr. Grennan had notified the staff last week that he would be out of state on March 23 and therefore unable to attend the meeting. Executive Director Texel stated that public notice for the meeting had been published in the Lincoln Journal Star newspaper on March 13, 2018. All background materials for the agenda items to be acted on had been provided to all Board members prior to the meeting and a copy was in each Board member’s notebook. The executive director announced that a copy of the Nebraska Open Meetings Act was on display on the north wall of the room for the public to review, and another copy was available in a three-ring binder on a table at the back of the room. A copy of all materials that the Board would consider was available for public inspection on a table in the back of the room, as well as extra copies of the agenda.

The Board first considered the draft minutes from its February 23, 2018, meeting. The staff did not have any recommended changes. Vice Chairman Morehouse moved to approve the minutes. Mr. Moen seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Morehouse – yes, Mr. Grennan – absent, Mr. Hutchison – yes, and Mr. Moen – yes. The motion carried 4– 0 with one absent.

The next agenda item was acceptance of the expense report for the month of February. In February, there was $23,251.68 in personal services, $16,768.65 in operating expenses, and $853.95 in travel expenses. The total expenses for February were $40,874.28. Vice Chairman Morehouse moved to accept the expense report for February. Mr. Hutchison seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Morehouse – yes, Mr. Grennan – absent, Mr. Hutchison – yes, and Mr. Moen –yes. The motion carried 4– 0 with one absent.

The next item on the agenda was to consider PRB-3873. This is an application filed by the Butler Public Power District for authority to replace one mile of 34.5 kilovolt (kV) line with a new 69 kV line. The application was filed on March 12, 2018. The existing line has been in place since the 1950’s and needs to be replaced. The new 69 kV line would be operated at 34.5 kV voltage. The Omaha Public Power District (OPPD) submitted a letter informing the Board that it does not object to the approval of the project and does not consider itself an alternate power supplier to build the new line. OPPD submitted this letter instead of the Board’s Consent and Waiver form because OPPD believed it did not have sufficient information to stipulate that Butler PPD “can most economically and feasibly supply the electric service resulting from the proposed construction.” The Board consulted with the Game and Parks Commission as required by Neb. Rev. Stat. section 37-807(3). In a letter dated March 21, 2018, the Commission determined there are no threatened or endangered species in the project area, nor habitat for them. The Commission determined the project would have “no effect” on such species, and did not object to the Board’s approval of the project. Mr. Moen moved to approve application PRB-3873. Vice Chairman Morehouse seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Morehouse – yes, Mr. Grennan – absent, Mr. Hutchison – yes, and Mr. Moen –yes. The motion carried 4 – 0 with one absent.

The next item on the agenda was to consider PRB-3874. This is an application filed by Nebraska Public Power District (NPPD) for authority to construct a 230 kV substation and two 230 kV tie lines. The application was filed on March 12, 2018. The purpose of the construction would provide service to the Rattlesnake Creek wind farm in Dixon County, Nebraska. Northeast Nebraska Public Power District filed a Consent and Waiver Form. The application estimated the cost of the project to be $1,415,000. Due to a misunderstanding this amount did not include the cost of the substation. NPPD submitted a letter with a corrected cost estimate of $6,250,000 for the project. Mr. Hutchinson asked about the contribution paid by the Rattlesnake Creek developer toward the cost of construction. The application stated that the customer would be paying the amount, which at that point was $1,415,000. The letter with the corrected total of $6,250,000 did not state whether the developer would be paying the rest of the corrected estimate that included the substation. The executive director had not asked that question, so he was not sure if the substation was dedicated entirely to the wind farm, or if it would provide additional system benefits that would cause NPPD to pay part of the construction costs. Robert Pick, NPPD’s Energy Market Strategies Senior Manager, told the Board that the Rattlesnake Creek wind farm is being built to provide renewable energy for a Facebook facility. OPPD will be purchasing the electricity from the wind facility. Mr. Pick explained the highway-byway cost allocation methodology and interconnection process that has been established by the Southwest Power Pool (SPP) for new generation facilities. The SPP is the regional transmission organization for a fourteen-state region in the central U.S., and both NPPD and OPPD are members of the SPP. Mr. Pick explained the SPP’s highway-byway transmission cost allocation where facilities at or above 300 kV are paid by allocating the costs to all members of the SPP (highway). Facilities from 100 to 300 kV are shared by the SPP members paying 1/3 of the cost and the local utility paying 2/3 of the cost. However, for facilities dedicated to interconnect new generation facilities, the entity responsible for building the generation facility normally pays the costs for facilities necessary to interconnect the facility with the transmission grid. Shirley Higgins, NPPD Governmental Affairs Coordinator, checked with other NPPD officials and confirmed that the Rattlesnake Creek developer is paying for the entire cost of the substation. Mr. Hutchison stated that he would like the Board to receive a letter confirming what Ms. Higgins had confirmed regarding the costs for the substation. Executive Director Texel told the Board the staff had consulted with the Game and Parks Commission as required by Neb. Rev. Stat. section 37-807(3). In a letter dated March 22, 2018, the Commission determined the project is in the range of the threatened Northern Long-Eared Bat, but there are no records of the bats in the project area, nor is there habitat for them. The Commission determined the project “may affect, but is not likely to adversely affect” any state or federally listed endangered or threatened species. The Commission did not object to the approval of the project. Mr. Hutchison moved to approve PRB-3874, with the condition that NPPD provide the Board with a letter confirming that the customer responsible for the associated wind farm will be paying the entire cost of the project. Vice Chairman Morehouse seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Morehouse – yes, Mr. Grennan—absent, Mr. Hutchison– yes, and Mr. Moen – yes. The motion carried 4 – 0 with one absent.

The next nine items on the agenda were considered together. The items were PRB-3875 through PRB-3883. Highline Electric Association (Highline) filed the applications for authority to continue serving nine customers in Dundy County, Nebraska. The applications were filed on March 15, 2018. The customers are in Southwest Public Power District’s retail service area. Highline has been serving these customers since the 1980’s with Southwest’s knowledge and consent, but evidently Highline never filed an application with the Power Review Board to officially transfer the right to service the customers to Highline. The executive director characterized the nine applications as a “clean up” matter. Southwest PPD filed a consent and waiver form for each of the nine services. The parties had identified the issue recently and wanted to make the transfers official. Vice Chairman Morehouse moved to approve PRB-3875, PRB-3876, PRB-3877, PRB-3878, PRB-3879, PRB-3880, PRB-3881, PRB-3882 and PRB-3883. Mr. Moen seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Morehouse – yes, Mr. Grennan—absent, Mr. Hutchison– yes, and Mr. Moen – yes. The motion carried 4 – 0 with one absent.

The next item on the agenda is to consider rescinding PRB-2818. In the 1980’s Southwest agreed to transfer the right to serve 23 irrigation wells and stock pumps to Highline. All 23 services were handled in one application. Southwest and Highline submitted a letter jointly requesting the Board to rescind the transfers approved in PRB-2818 so that Southwest could take back the right to serve those loads. Both utilities agree that it would now be better for Southwest PPD to serve the 23 loads. Chairman Reida asked if there was any compensation involved in the transfers. Executive Director Texel explained that some utilities do put a condition in the Consent and Waiver form that provides for compensation at the depreciated value of the facilities constructed to serve the loads. The consent and waiver forms for these applications did not have any such a condition. Southwest and Highline seem to be reviewing the services along their border and agreeing to work out who can best serve which customers along the border. He thought it was a good example of public power systems working well together for the benefit of their customers. Vice Chairman Morehouse moved to approve the request to rescind PRB-2818. Mr. Hutchison seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Morehouse – yes, Mr. Grennan—absent, Mr. Hutchison– yes, and Mr. Moen – yes. The motion carried 4 – 0 with one absent.

The next item on the agenda is to consider rescinding PRB-2825. This is very similar to the PRB-2818 situation. Southwest and Highline sent a letter asking to rescind the transfers of loads identified in PRB-2825. In PRB-2825, the PRB approved the transfer of the right to serve seven 7 irrigation wells and stock pumps in Southwest’s service area to Highline. This also occurred in the 1980’s. Both utilities agree that it would be better for Southwest to take back the right to serve the seven loads. Mr. Hutchison moved to approve rescinding PRB-2818. Vice Chairman Morehouse seconded the motion. Voting on the motion: Chairman Reida – yes, Vice Chairman Morehouse – yes, Mr. Grennan—absent, Mr. Hutchison– yes, and Mr. Moen – yes. The motion carried 4 – 0 with one absent.

The next item on the agenda was the executive director’s report. The first item discussed was an update on Southwest Power Pool (SPP) activities. Mr. Grennan had sent a couple e-mails updating the Board on the SPP forming a “Holistic Integrated Tariff Team” (HITT). Mr. Grennan will be a member on the new team. Mr. Hutchison asked the executive director to see if Mr. Krajewski could provide an update in his monthly activities report letter on the HITT team’s activities.

The executive director then discussed the bills pending in the Nebraska Legislature that the staff is monitoring.

LB 820 was introduced by Senator Hughes at the Board’s request. This is the bill that would allow the Board to fine a privately developed renewable energy generation facility in order to waive the requirement that the notice be submitted at least 30 days prior to commencement of construction or installation of the project. The bill was amended into LB 1008. LB 1008 puts four bills together and makes them one new small omnibus bill. In addition to the Board’s renewables bill, another section is the bill that would allow both public power entities and the PRB to withhold from public disclosure proprietary and commercial information that would give an advantage to competitors. LB 1008 includes an emergency clause for the PRB’s renewables section and the public records section. Senator Larson strongly opposed the bill and led a filibuster. Senator Larson’s efforts to filibuster the bill were unsuccessful, ending in procedural votes of 2-38 and then 2-40. The amendment merging all four bills together was approved and the bill was advanced to Select File.

LB 948 was introduced by Senator Murante at the request of the Governor. This is the bill that would eliminate the need for agencies to adopt the Attorney General’s model rules of practice and procedure and instead make the model rules part of the Administrative Procedure Act, but allowing agencies to modify certain sections based on the particular needs of the agency. Senator Thibodeau designated this as her priority bill. The bill is on General File and was debated. There are several Senators opposed to the bill and are leading a filibuster against it.

The executive director told the Board that its new website will go live on March 26. This was a much needed update to the website and it will make it easier to do the updates to the website compared to the old format. The new system is similar to the Microsoft programs.

The executive director noted that the next meeting dates are April 20, May 18, and June 22, 2018. The April and May meeting dates are not on the normal fourth Friday of the month due to a holiday and a scheduling issue, respectively.